BlackRock Chief to CEOs: Greed has to Go

Board members are receptive to BlackRock boss Larry Fink's message on responsible investing, says John Rekenthaler

John Rekenthaler 25 January, 2018 | 1:31PM

Wall Street traders

The 1987 film Wall Street was fiction, but the sentiment “Greed is good” was not. Bruised by stagflation from the previous decade, and by the belief that American corporate dominance was fading, several influential parties in the 1980s – Wall Street stock analysts, fund managers, and business-school professors – urged corporate CEOs to reform. No longer should CEOs have multiple goals. Ultimately, their task was to please but one party: the shareholders. 

In other words, greed became good. By the new ethos, the stock market's heroes were those CEOs who worked tirelessly to increase their companies' share prices. They weren't primarily motivated by duty, or community spirit. Instead, they were driven by financial desire. Their motivation was beside the point, however. What mattered were the blessings that came from their actions. The new breed of CEOs transformed fat, inefficient firms into lean machines.

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About Author

John Rekenthaler

John Rekenthaler  John Rekenthaler is vice president of research for Morningstar.

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